Restoring confidence in our political, financial and legal sector.

Every commentator appears to agree that until the banks and the financial systems are cleaned up our economy will not recover. As taxpayers and citizens of this country we have to ask, how did we get here? Who was responsible for regulation of the banking sector in Ireland? Who were the banking executives that so mismanaged our economy? Who are the principle debtors to the banks? What are their assets? Will anyone be convicted for economic and financial crimes in this country?  Finally, how effective are the measures being taken by our Government to protect the welfare of its citizens in dealing with this crisis?

Last week I read with grudging admiration in the Wall Street Journal of how one country, ranked 44th in the world according to GDP (compared to Ireland’s position at 34th), is responding to their own banking crisis; it made fascinating reading. While the similarities with Ireland were noticable; a small powerful business elite accustomed to a lifestyle of excess and businesses fuelled by unchecked credit lines etc., their response to the crisis was remarkable.

As with Ireland their credit ran out, the financial markets were no longer sustainable. The country in question had to inject $2.6 billion (€1.8 billion) to bailout the countries top five bank’s, which had accumulated $7.6 billion in bad debts threatening the survival of this continent’s second biggest economy.

Earlier in March this year, the Economist noted of this same country that the banks were at risk because they were dangerously exposed to the stockmarket slump after rashly securing a large portion of their loans with now almost worthless equities. Does this sounds familiar?

So how is this country attempting to restore confidence in its financial sector you may ask? Their central bank last week made the unprecedented move of publishing a list of the top debtors to the banks, among them some of the wealthiest and most powerful people in that country.

Last Wednesday, their Government’s Economic and Financial Crimes Commission (EFCC) said that the debtors had one week to repay their loans or risk arrest and seizure of their assets.

The list included the countries only two billionaires, two previous heads of the country’s stock exchange, several companies, two state governments, the former governor of the richest state and the ministry of finance.

After injecting $2.6 billion into the country’s top five banks, the central bank fired the top executives of these banks, executives from four of the five banks have been questioned by the economic and financial crimes commission and the country’s top anti-corruption unit and bank managers at five banks have been put on a watch list to prevent them from leaving the country.

Not only that but the head of the EFCC stated “that debtors have one week to bring in their checks or drafts to us or we begin their arrest and prosecution as well as confiscation of their assets because they are people of enormous means”.

Now that’s taking action!  So where is this country.  It’s Nigeria.

Here in Ireland the Government have injected over €10 billion to bailout the banks that we are now told have accumulated €90 billion in bad debts. That’s more than ten times the level of bad debt compared to Nigeria, a country with a population of approximately 160 million people.

The people who got us into this position have committed an economic crime of unprecedented scale against the citizens of this nation robbing us of future economic stability while ensuring that our taxes, which should be being used for essential services such as healthcare, education, infrastructure and building a sustainable economy; are used to bail out a corrupt and irresponsible banking sector.  In my view, we can learn a lot in this instance from Nigeria. 

If our political establishment abdicate on not bringing those responsible to justice and if those individuals and institutions whose actions have been shown to be criminally negligent remain unpunished, one cannot have any faith in our political, financial or legal sector.  The stark reality is that this culpability starts with our former Minister for Finance, now our Taoiseach.

As for NAMA, it poses a big dilemma; the start reality is if the Green Party support the legislation in its current format without protecting the rights and interests of the public, if no one is held accountable, if those who were responsible for this crisis are rewarded or compensated for their actions; the Green Party will have lost all moral authority. In the interim the party may remain in power but it will lose its grassroots support and signal the end of the Green Party. Never before has such a small political party had such responsibility.  For how long can the Green Party support the weight of mistakes by past Governments, mistakes that over the past twenty years the electorate in many respects demanded by voting for them. 

In the end it would be a greater travesty if the one political party that opposed the politics of bribery, corruption and cronyism are the sacrificial lamb that bleeds to death to save our political establishment.